Plans to levy VAT on five-a-side leagues would put free kickabouts for
hundreds of thousands of state-educated children in jeopardy, firms claimed
today.

The Telegraph has launched a campaign against an exchequer clampdown on the sport that could see each player paying up to £7.50 per fixture.

But in the latest development, firms which run the leagues said they might be forced to cancel arrangements to let local schools use their facilities for free if their finances are squeezed by the tax.

Industry sources said over half a million state-educated children use their football pitches free of charge.

But a spokesman for PlayFootball, which runs leagues at 18 pitches, said: “Someone has to absorb the cost somewhere. It may be that in the future instead of kids getting the service for free it might be that unfortunately the schools will have to start paying for it.

“It is difficult for businesses which are running on low margins to absorb that cost. It might have to be cancelled and that wouldn’t be fair on local state school kids.”

Leagues believed they did not need to pay VAT because they were providing a social good by encouraging people to exercise. But HMRC argues that leagues do not simply provide land, which is exempt from tax, also organising fixtures and changing facilities, services it says should be liable for 20 per cent tax.

Sports minister Hugh Robertson has also written to Treasury minister David Gauke to express his concerns about the "detrimental effects" VAT would have on the sport in a year when the Government is trying to focus on an "Olympic legacy".